The Latest on Case Shiller and Home Prices

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the Case Shiller home price index and consumer confidence.

Case Shiller data showed that its measure of prices moved in the same manner that other price measures have moved recently—up sharply. Case Shiller data showed an increase of 12.1 percent over June 2012 for its 20-city index and 11.9 percent for the 10-city index. This was the 4th consecutive month of year-over-year gains in both indexes.

With this release, Case Shiller also published quarterly national data based on a broader range of areas which showed a gain of 10.1 percent over the 2nd quarter of 2012.

This data is in line with information released previously by NAR and others showing substantial gains in home prices (pictured above). NAR reported a 13.4 percent increase in the median price from June 2012 to June 2013, and CoreLogic reported an 11.9 percent gain while FHFA reported a 7.7 percent increase during the same period.

NAR reports the median price of all homes that have sold while Case Shiller, CoreLogic, and FHFA report the results of a weighted repeat-sales index. Because home sales among higher priced properties have been growing more than among lower price tiers, the NAR median price has risen by more than the weighted repeat sales index—which computes price change based on repeat sales of the same property.

Case Shiller data is based on a 3 month moving average, so reported June prices include information from repeat transactions closed in April, May, and June. For this reason, the changes in the NAR median price tend to lead Case Shiller. NAR data showed continued growth in July, so expect repeat prices to follow suit.

By market in the 20 cities covered by Case Shiller, metros in the West lead the pack, a trend seen in other measures. Las Vegas posted the biggest year over year increase with a gain of 24.9 percent followed closely by San Francisco at 24.5 percent. The slowest growing metro in the last year according to Case Shiller was New York where home prices increased only 3.3 percent. Still, all 20 metros showed year-over-year gains, and 12 of these were double-digit gains.

Separately, the Conference Board registered a slight increase in preliminary Consumer Confidence in August. The index is up to 81.5 from 81.0 in July. While the index for the present situation declined, the expectations index increased.